Equity markets opened on a tepid note Wednesday morning as concerns over potential US tariffs weighed on investor sentiment despite positive global cues. The benchmark Sensex traded at 75,925.98, down 41.41 points or 0.05 per cent, while the Nifty50 stood at 22,918.95, declining 26.35 points or 0.11 per cent from its previous close.
The cautious stance comes after US President Donald Trump announced plans to impose a 25 per cent tariff on automobiles, pharmaceuticals, and semiconductors, triggering sector-specific volatility in domestic markets. Pharmaceutical stocks bore the brunt of this news, with Dr. Reddy’s plummeting 3.96 per cent, followed by Cipla (-2.15 per cent) and Sun Pharma (-1.92 per cent).
“Despite largecap valuations turning fair, and even attractive in segments like financials, the market continues to be weak,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Seen in the context of new records being set by S&P 500 and Nasdaq, India’s underperformance is striking.”
Market experts suggest that the recent calm indicates that fears around ‘Trump Tariffs’ may have been initially overblown, but sector-specific impacts are becoming clearer. Defensives like power utilities showed resilience with NTPC gaining 1.16 per cent on nuclear power expansion plans.
“The market is expected to open flat today due to a muted performance in Asian markets following news that the US President plans to impose a 25 per cent tariff on automobiles, pharmaceuticals, and semiconductors,” noted Mr. Vikas Jain, Head of Research at Reliance Securities.
Technically, analysts point to critical support levels that could determine market direction. “Nifty could gather support between 22,940 and 22,800 and notice resistance between 23,050 and 23,180 in the next trading session,” according to VLA Ambala, SEBI Registered Research Analyst.
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The broader market sentiment remains influenced by global factors, particularly the upcoming FOMC minutes scheduled for release today. “All eyes are on the FOMC minutes due this Wednesday, which are expected to highlight a hawkish Federal Reserve and dampen hopes of rate cuts,” warned Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
Foreign institutional investors (FIIs) turned net buyers after nine consecutive selling sessions, purchasing equities worth ₹4,786 crores on February 18. Meanwhile, domestic institutional investors (DIIs) continued their buying streak for the tenth consecutive session, acquiring equities worth ₹3,072 crores on the same day.
In commodities, gold touched record highs amid safe-haven demand. “Gold and silver extended their gains in the international markets, with gold closing at a new record high due to strong safe-heaven demand amid uncertainty over U.S. trade tariffs,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd.
Crude oil also saw gains following Ukrainian drone strikes on a Russian oil pipeline. “A drone struck the Kropotkinskaya pipeline pumping station in Russia’s southern Krasnodar region, reducing oil flows from Kazakhstan to world markets by 30-40 per cent approximately 380,000 barrel per day,” Kalantri explained.
The market’s technical structure shows signs of potential reversal. “After an early morning intraday correction, the market took support near 22,800/75,500 and recovered,” observed Shrikant Chouhan, Head Equity Research at Kotak Securities.
Chinese market developments present another challenge for Indian equities. “News of Chinese authorities encouraging their top businessmen to invest is another headwind for India since Chinese stocks are cheap and may attract big inflows from FIIs, which means FIIs might continue selling in India,” added Dr. Vijayakumar.
Despite the concerns, some positive trends emerged in the offshore fund space. “Despite an earnings slowdown and aggressive FIIs outflow, India-focused actively managed offshore funds received net inflows of USD 4.6 billion,” highlighted Ms. VLA Ambala, suggesting continued long-term confidence in Indian markets.
Sector-wise, IT index gained nearly 1 per cent in the previous session, while the defence index was the top loser, shedding over 3 per cent. Power and metal stocks are expected to perform positively due to falling coal prices, which have dropped to a four-year low.
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